Interest Calculator
Calculate simple interest and compound interest on savings, loans, or investments. Compare interest earned over time with daily, monthly, or annual compounding for accurate financial planning.
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Investment Details
$
Initial investment or loan amount
% per year
years
How often interest is calculated and added
Interest Calculation Results
Future Value
$12,833.59
Total after interest
Interest Earned
$2,833.59
Effective Rate (APY)
5.67%
Growth Summary
Initial Principal:$10,000.00
Total Interest (5% for 5 yrs):+$2,833.59
Final Amount:$12,833.59
Compounded monthly
Compound Interest Benefit: With compound interest, you'll earn $333.59 more than simple interest over 5 years.
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How to Use the Interest Calculator
Choose between simple or compound interest, enter your principal amount, interest rate, and time period. For compound interest, select how often interest compounds. The calculator shows your final balance and total interest earned.
Interest Formulas
Simple Interest:
Interest = Principal × Rate × Time
Final Amount = Principal + Interest
Compound Interest:
A = P(1 + r/n)^(nt)
Where: A = final amount, P = principal, r = rate, n = compound frequency, t = time
When to Use Each Type
- Simple Interest: Short-term loans, bonds, some certificates, quick calculations
- Compound Interest: Savings accounts, investments, credit cards, most financial products
Compound Frequency Comparison
Example: $10,000 at 5% for 10 years
| Frequency | Final Amount | Difference |
|---|---|---|
| Annually | $16,289 | baseline |
| Quarterly | $16,436 | +$147 |
| Monthly | $16,470 | +$181 |
| Daily | $16,487 | +$198 |
Maximizing Interest Earnings
- Choose accounts with daily compounding when possible
- Leave money invested longer to maximize compound effects
- Reinvest dividends and interest payments
- Start early - time is more powerful than rate for compound growth
- Compare APY, not just APR, when shopping for accounts
The Power of Compounding: Albert Einstein allegedly called compound interest "the eighth wonder of the world." Start early and let time work its magic. $100/month at 7% for 40 years = $262,481!
Frequently Asked Questions
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